CNBC carried an interview with oil market analyst Vandana Hari, founder of Vanda Insights. Video is here.
In summary:
Limited Influence of U.S. Leadership:
- Despite former President Trump's pro-drilling rhetoric, U.S. oil producers prioritize technological advancements over expanding drilling activities.
U.S. Production Trends:
- U.S. oil production grew by approximately 300,000 barrels per day in 2024, a significant slowdown from the nearly 1 million barrels per day increase the previous year.
- Modest growth is expected to continue into 2025, driven by price sensitivity, with production likely to remain steady if WTI crude stays above $65–$70 per barrel.
Global Production Growth:
- Increased oil output is expected from Canada, Brazil, Argentina, Guyana, and Norway, with more consistent and predictable production trends.
OPEC+ Strategy:
- OPEC+ has delayed easing 2.2 million barrels per day of production cuts, showcasing a united and patient strategy for gradual supply increases.
- The group aims to maintain Brent crude prices above $70 per barrel, which is likely the maximum price support they can offer without overextending its influence.
- “I think that is where the market attention is focused because that’s the variable. With OPEC+, we’ve seen three postponements of the unwinding of the 2.2 million barrels per day. What that tells me is that OPEC+ despite all the talks in the market speculation is managing to remain cohesive”
